ARM to consider higher dividend ratio, buybacks to reduce cash

BARCELONA

BARCELONA Nov 15 (Reuters) - British chip designer ARM
said it could increase its dividend payout ratio or buy
back shares to reduce its cash pile, which it built up as a
buffer to uncertainty in the global economy.

Chief Financial Officer Tim Score said the company had
allowed cash to "ride up" since the downturn. It had 478 million
pounds ($760 million) of cash on its balance sheet at
end-September.

"Since the downturn we've grown the dividend at 20 percent
per annum, and gradually increased the payout ratio by growing
it faster than earnings," he said at the Morgan Stanley
Technology, Media and Telecoms conference on Thursday.

"Potentially that in itself would not be enough to keep the
cash pile under control, in which case we will do other things:
we may do other buybacks, we may step up the dividend."

"The plan on the record is to grow the payout ratio, and
probably over time the 30 percent payout (ratio), as it is now,
will trend to 50, and potentially north of there."

ARM consistently outperforms average growth levels in the
semiconductor industry, partly because its chip designs are
favoured in the fast-growing segments of smartphones and
tablets.

Its processor blueprints are licensed to chipmakers, which
in turn pay it a royalty of 1-2 percent of the selling price for
each chip shipped in devices like Apple's iPhone and
iPad.